Arthur Hayes, the creator of BitMEX, made a daring forecast on the future of Bitcoin (BTC). In the upcoming weeks, he thinks the price of cryptocurrencies will drop to $50,000, but by late September, it will have recovered significantly. The rising reverse repurchase agreement (RRP), connected to the Federal Reserve’s impending interest rate decisions, is a significant economic element shaping this prognosis.
In essence, the RRP is a financial ploy in which stocks are sold with the promise to be repurchased later for a more significant sum. An increase in the RRP index frequently indicates less market liquidity, which has historically driven down the bitcoin price. According to Hayes, Bitcoin may continue declining if the Federal Reserve does not lower interest rates before its meeting on September 18.
Hayes cautions that cryptocurrencies might suffer considerably more if BTC declines. During market downturns, these assets usually show more volatility and underperform. According to Hayes, this will cause an abrupt drop in altcoin values, or a “capitulation.
Bitcoin Bears Promise Long-Term Rewards
Despite his short-term pessimism, Hayes is still optimistic about the long-term prospects of Bitcoin and a few other altcoins. During the anticipated decline, he intends to purchase altcoins at reduced costs, concentrating on what he terms “solid shitcoins” with actual worth. Although Hayes hasn’t revealed his current selections, he has previously expressed interest in tokens like Pendle and Etherna.
In the future, Hayes sees a significant increase in BTC by late September. He links this to the anticipated reduction in Federal Reserve rates, which he thinks would re-establish market liquidity and raise the cost of riskier assets like Bitcoin. According to Hayes, the Fed will cut interest rates to a range of 5.25% to 5%, which will rekindle interest in cryptocurrencies.
Hayes thinks that if his forecast comes true, Bitcoin will bounce back and pave the way for an even bigger bull run. He sees Ethereum reaching $4,000 and Bitcoin regaining $70,000, which would increase altcoin.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
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